Riding a Straight Edge of Success

Razor & Tie’s Cliff Chenfeld and Craig Balsam have built a major entertainment company by capitalizing on the power of direct response.

The Music Men
It seems that, perhaps, entertainment is an even tougher industry to be in today than advertising and marketing. With so many big names to compete with, and so many rapidly changing formats — think about the swift migration to digital and MP3 players — R&T has found a way to compete and shine.

“I think that the major labels are having issues because the structure is changing dramatically, and you have to adjust and change the model really quickly. You can’t assume you’ll sell the same units as you did a few years ago or assume a marketing spend will go as far as it used to,” says Chenfeld. “We’ve not only adjusted, we get bigger and they get smaller — now, we are able to compete with companies we couldn’t a few years ago.”

In fact, R&T was awarded the rights to market and sell the original motion picture soundtrack for the Alvin and The Chipmunks movie, which was a big win. As a smaller label, R&T can offer the strength of a major label, but more efficiently respond to the needs of the artists and customers. Plus, R&T can use its connections in DRTV and other segments of the industry to cross-promote a new artist with other successful products. For instance, R&T often promotes a new artist during spots for the wildly successful Kidz Bop.

“No one knows what will happen in the movie, TV or music business, but it’s changing and we try to stay ahead and try to do things that are responsive to changes in the market,” Chenfeld says. “We’re not your typical entertainment company. Most are either an indie rock label, or a kids producer, or a publishing company. We have tentacles in all those places.”

Balsam agrees that R&T is well positioned for the changes in the music industry. “While this, of course, is a challenging environment, there have never before been so many tools at your disposal to figure out what consumers want and deliver that to them,” he contends. “From direct response TV advertising, digital marketing, interactive advertising, targeted E-mails and the like, there is no excuse for not being attentive to the customers’ tastes and expectations.”